This irrationally exuberant, risk appetite may continue in 2015 but we suspect that it is as likely to come to a shuddering halt with renewed volatility on global financial markets.

The sharp falls seen in stock markets in recent days may be a taste of what may transpire in 2015. As may be the tragic events in Paris.

There are many unresolved risks which were present in 2014 and indeed in recent years which did not come to the fore and impact markets. As Greece has shown again in recent days – the Eurozone debt crisis is far from resolved and there remains an underappreciated risk of sovereign crises in other major industrial nations.

Other unresolved risks that are being ignored for now – due to the panacea of cheap money and elevating asset prices – include the Eurozone debt crisis, the appalling fiscal position of Japan, the U.S. and the UK, the risk of an Ebola pandemic, risks posed by terrorism, the events in Syria and the Middle East, Ukraine and geopolitical tensions with Russia.

Gold – Positives and Negatives

As ever, there are positives and negatives for gold. Indeed, one could say there are as many negatives as there are positives – and most do. However, on balance we believe that the positives outweigh the negatives significantly.

Gold’s Positives

Continuing ultra-loose monetary policies

Currency wars and the risk of bail-ins

Risk of sovereign and banking debt crises and the risk of systemic contagion

Increasingly uncertain political and military situation globally and the threat of terrorism and war

Continuing record demand for gold from China and India

Continuing robust demand from central banks such as the People’s Bank of China (PBOC) and Central Bank of the Russian Federation

Sentiment, both in the western media and among the public, remains extremely poor. This is bullish from a contrarian perspective

Gold’s Negatives

Gold in dollar terms is weak technically after a second consecutive year of lower prices

The massive fall in the oil price, should it continue, will benefit gold miners and lower their cost of production which should lead to a lower cost of gold production

ETF demand remains weak and liquidations very high – holdings in SPDR Gold Trust, the world’s gold ETF, fell 0.42 percent to 704.83 tonnes on Wednesday, their lowest since late 2008

Gold bullion demand while robust in Germany, Turkey, the Middle East and Asia remains lackluster in western markets as seen in the fall in demand from the U.S. Mint and other mints

Sentiment, both in the western media and among the public, remains extremely poor

Ultra Loose Monetary Policies Globally

Ultra loose monetary policies are set to continue for the foreseeable future. Major central banks have all kept interest rates at or close to zero

Source: Rba.gov.au

The narrative that the U.S. is tightening continues to be a false one – one heard for many years now. Any meaningful increase in U.S. interest rates would likely severely impact already stretched and stressed asset markets and plunge the U.S. and the world into a depression.

Since 1694 and the ensuing three centuries’ of Bank of England history, the base rate has never been this low. Interest rates in the western world have never been this low.

A reversion to the mean average – at around 5% to 6% – would create a collapse in property and stock markets. Even the merest hint of a rate rise has led to sharp market falls in recent months.

ZIRP or zero percent interest rates have arrived and there is now the incredible, previously unheard of scenario of negative interest rates. Already, certain banks in the U.S. and Europe are charging customers interest just to have a deposit account with them.

This turns upon its head the basic tenet of capitalism in terms of a return on capital.

Source: AEI

While America’s massive bond buying programme has been discontinued for now, it continues in the UK, has intensified to a very significant degree in Japan and we may see Mario Draghi’s QE ‘bazooka’ in the Eurozone in the New Year.

The battle between Goldman banker Draghi and German monetary conservatives is a titanic one and the outcome will have ramifications not just for the Eurozone but for the world.

Draghi has won many battles regarding pushing interest rates to zero. However, further money printing will likely be ‘verboten’ and a step too far for the Germans. I am not a betting man but if forced to bet, I think that Draghi may win the immediate battle on further money printing but that the Germans will win the war.

Germany has learned the lessons of the past and will not allow their currency to be printed into oblivion.

Since the 2008 crash, the Federal Reserve has created more than $4.3 trillion to prop up banks and the wider economy. While the Fed finished its bond buying programme in 2014, its balance sheet has been destroyed and it is unable to sell the bonds bought for fear of interest rates moving higher again.

The U.S. economic recovery is weak and there is the strong possibility of a recession. The massive levels of debt at all levels of U.S. and indeed western society make any meaningful recovery highly unlikely.

This possibility is also heightened by the recent collapse of the oil price and falls in other key commodities such as copper. Deflation is in the air. A reversion back to debt monetisation programme seems likely.

America, and indeed the world, is now dangerously addicted to cheap money and the attendant debasement of the dollar and all paper currencies. Yellen will continue pushing the drug of cheap money, much of which ends up on Wall Street and in frothy global markets.

Indeed, she may be even more generous in doling out wads of electronic currency than her predecessor Bernanke. Irrationally exuberant, liquidity-driven stock markets and manipulated bond markets are giving false signals.

We may need one last and vicious deflationary spiral, further currency printing and then the Ludwig Von Mises’ “crack up boom”. Irrational exuberance and levitating asset prices are early warning signals of a classic cheap money crack up boom:

“‘This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.’

“But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

“It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.”

Central banks are attempting to inflate their way out of the present crisis rather than the more prudent option which is to avoid a deflationary collapse by downsizing the massively oversized and over leveraged banking and financial system.

This could be done, with grave difficulty admittedly, but could be done nevertheless through a multi month or year process of downsizing, debt write offs and write downs, deleveraging and consolidation.

With the Federal Reserve’s balance sheet having deteriorated significantly, at some stage this will lead the dollar having a sustained period of weakness. A monetary crisis centering on the dollar remains likely. A frightening vista that most cannot bring themselves to consider, let alone comprehend.

Currency debasement will end in financial tears as they have done throughout history. The question is not if, rather when.

Precious metals will only be threatened if currency debasement ends and if there is a sustained period of rising interest rates which lead to positive real interest rates – as happened in the 1970s.

That is not going to happen anytime soon.

Currency and Gold Wars

Currency wars, gold wars, currency devaluations and currency debasement are set to continue globally which remains possibly the most bullish factor for gold.

Currency wars look set to heat up again in 2015. The latest salvo is Japan’s radical, or reckless, decision to further debase its currency through an intensification of already significant monetary easing.

A new “all-out” currency war is possible in 2015 as nations seek to maintain exports and jobs through currency devaluation. China and Japan – as two of the world’s largest exporting countries – may be set to be the most aggressive in this regard.

Japan is devaluing the yen and China will be reluctant to allow that to happen. China is likely to devalue the yuan in order to maintain export competitiveness.

If Draghi is allowed to get his ‘Euro Bazooka’ out – we may see further weakness of the euro – especially versus the dollar. At the same time, the U.S. cannot afford to have the dollar strengthen much more against the euro as it will impact exports to one of its largest trading partners.

The second aspect of currency wars is the continuing accumulation of gold reserves by nations for diversification purposes and in the case of China, in order to position the yuan as an alternative global reserve currency.

Risk of Bail-Ins in 2015 and Beyond

Bail-ins remain one of the least covered and most unappreciated risks for 2015 and in the coming years. As we have documented, most western nations have put or are putting in place the architecture for bail-in regimes.

Preparations have been or are being put in place by the international monetary and financial authorities, including the Federal Reserve, ECB and Bank of England for bail-ins. The EU, UK, the U.S., Canada, Australia and New Zealand all have plans in place for bail-ins in the event of banks and other large financial institutions getting into difficulty.

Now in the event of bank failure, deposits of individuals and companies can be confiscated.

Just last month, credit rating agencies warned that Europe’s banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins.

Assessing counterparty risk and sovereign risk remains important. Do not have all your savings or company’s capital in a vulnerable bank in a vulnerable sovereign. A diversification into allocated gold outside the banking system remains an important way to hedge the real risk of bail-ins.

Eurozone Debt Crisis Again – Greece, ‘Grexit’ and ‘PIIGS’

In the early days of 2015, the Eurozone debt crisis raised its ugly head again as concerns about the ‘Grexit’ – Greece leaving the monetary union and reverting to the drachma, led to sharp falls in stock markets and indeed the euro.

Concerns over a potential Greek exit or ‘Grexit’ also led to the euro falling against the dollar and particularly gold which surged to close to EUR 1,030 per ounce. Gold in euros is already up 5% in 2015, building upon the 11% gains seen in 2014.

Angela Merkel sought to calm markets and EU citizens by claiming that Germany would be “comfortable” with a Greek exit and that “any fallout would be manageable.” EU citizens in Greece were alarmed by her comments and politicians quickly sought to reassure Greeks that this could not happen and there was nothing to fear. A frequent refrain by politicians prior to economic dislocations.

Germany likely fears the precedent of reopening negotiations between the Troika and Greece, lest other countries upon whom very onerous conditions were placed – such as Ireland – follow their example.

The assertion that the EU could “comfortably” manage the exit of Greece is irresponsible – particularly at this very delicate and uncertain time for the European economy.

Italy’s former Prime Minister, and former head of the European Commission, Romano Prodi warned last week that the “lowering of the oil and gas prices in combination with the sanctions, pushed by the Ukrainian crisis, will drop the Russian GDP by five percent per annum, and thus it will cause cutting of the Italian exports by about 50%.”

Similar dynamics are playing out in Poland and France. Continued antagonisation of Russia may have dire consequences for Europe, especially if Russia chooses to respond more aggressively. France’s Société Générale, alone, is exposed to Russia to the tune of €26 billion.

Were Russia to renege on this and other obligations to European banks it would likely trigger a Lehman style crisis.

Or Russia could cut its supplies of natural gas to Europe upon which German industry, in particular, relies. Thankfully, for now, Russia has reacted diplomatically and conciliatory, even inviting Europe to become a partner in the newly formed Eurasian Economic Union (EEU).

Germany is now dangerously close to deflation as the major states reported from 0% to 0.3% inflation in December, with Saxony at 0.5%, – down from November rates of between 0.5% and 0.8%.

With these and countless other considerations weighing upon the EU, it is not accurate to suggest that a Greek exit and return to the drachma could be comfortably managed.

For one, there is no framework in place for an orderly secession of a member state from the Union. An antagonistic break up would likely cause contagion to many large European banks exposed to Greece.

The ensuing turmoil might also prompt other member states to break away in chaotic fashion – Spain, Portugal and Italy being prime contenders.

Many periphery nations are slowly becoming jaded by the not so single currency and attendant austerity. For almost half the euro’s existence it has been in crisis.

It is likely that the EU will do everything in its power to accommodate Syriza should they gain power in Greece. Whether it will be enough to keep Greece on board and the drachma off the printing presses remains to be seen.

Gold will protect from currency devaluations – whether that be in the form of the euro itself being devalued or in the form of reversions to drachmas, escudos, pesetas and punts and subsequent devaluations.

We all know and accept that the “debt can” was kicked down the road. Yet, most remain in denial about the ramifications of this and re-emerging risks. At the end of the road there is a sharp cliff.

Global Debt Crisis II – Total Global Debt to GDP Ratio Over 300%

UK, U.S. Japan and China Also Vulnerable

The global debt crisis has abated in recent years but more astute analysts and economists are concerned that it is only a matter of time before the debt crisis returns.

Since the crisis began in 2007, total global debt, public and private, has continued to rise sharply.

The total debt to GDP ratios – household, corporate, financial and sovereign debt – in the Eurozone, Japan, the UK and the U.S. are all at very high levels.

Total global debt, public and private, is estimated to be between 245% and over 300% of total global GDP.

In a comprehensive report on global indebtedness, economists at ING found that debt in developed economies amounted to $157 trillion, or 376% of GDP. Emerging-market debt totaled $66.3 trillion at the end of last year, or 224% of GDP. This report was in May 2013. Debt levels have continue to increase sharply since then.

At the time, the total indebtedness of the world, including all parts of the public and private sectors, was estimated at $223.3 trillion, amounting to 313% of global gross domestic product.

More recent figures come from the Institute of International Finance (IIF), a leading global association of financial institutions in June of this year estimated that global debt, even excluding the financial sector, was equivalent to 245% of total global economic activity or GDP. Obviously, the financial sector is one of the more important categories in terms of debt. That’s up from 214% in September 2008 when the financial crisis was going into its most intense phase.

Most western nations have large banks whose outlook is far from positive and some of which are vulnerable to insolvency and bail-ins.

Many analysts warn that many Wall Street and City of London banks are bigger now than they were prior to the collapse of Lehman Brothers and the shadow banking system is of a greater size now.

$1 Quadrillion “Weapons of Mass Destruction” Derivatives

The worldwide nominal value – also known as the notional or “face” value – of derivatives tripled in the five years leading up to the recession, at which time it was over a whopping $600 trillion, according to the Bank for International Settlements (BIS).

Little has been learned since then and the total value of the derivatives market has actually gotten much bigger.

Although recent BIS data shows only a little growth in the overall value of derivatives, derivatives experts believe that the market has continued to expand rapidly. It is just not apparent in the murky world of the shadow banking system.

While there’s no way of knowing for sure, estimates of the face value of all derivatives outstanding tops a quadrillion (1,000 trillion) dollars, or more than 14 times the entire world’s annual GDP. By comparison, the total value of all the stocks trading on the New York Stock Exchange is roughly $15 trillion.
Warren Buffett’s financial weapons of mass destruction are proliferating significantly. The time bomb will go off in 2015 or later and could be the catalyst which leads to a collapse of the current financial and monetary system and the global financial, economic and currency reset.

The global financial system remains far from safe.

Cold War II and New World Order as China and Russia Flex Geopolitical Muscles

Geopolitical tensions in the Middle East and rising tensions between Russia and China and the U.S. are set to continue in 2015 and may escalate.

The new Cold War risks sparking some dangerous proxy hot wars in Ukraine and the Middle East.

A new and potentially more dangerous Cold War is upon us. Respected former Soviet leader Mikhail Gorbachev has warned that the “trust created by hard work and mutual effort” that led to the end of the Cold War has completely “collapsed”.

Instead of a new world order built on peace and stability, he warned this week that Western hubris has led to the renewal of age-old rivalries and heightened global tensions – turning a “blister” into a “festering wound.”

Mr Gorbachev calls for renewed dialogue between Russia and the West, leading to the lifting of economic sanctions. Economic sanctions are badly affecting many European economies – especially the already vulnerable periphery nations.

The international crisis regarding Syria abated after the U.S. backed down from military action after the Russian diplomatic offensive and due to strong political and public resistance internationally. China remained silent in the wings.

However, the Middle East remains a powder keg and the risk of a wider conflict in the region centring on Israel and Iran remains real. The risk of a conflagration involving Sunni versus Shia muslim nations is also increasing.

Although, the tensions with Russia is possibly the greatest geopolitical challenge and risk.

It is worth listening to the words of Gorbachev as he a respected international statesman and not a stooge of Putin and the Kremlin.

This week in an Op-Ed in Project Syndicate, he wrote, “Though I am, by nature, an optimist, I have to admit that it is very difficult not to be pessimistic as 2014 comes to a close.”

“Nonetheless, we must not submit to panic and despair, or allow ourselves to be drawn into a vortex of negative inertia. The bitter experience of the past few months must be transformed into the will to reengage in dialogue and cooperation. This is my appeal to our leaders, and to all of us, for 2015: Let us think, propose, and act together.”

Let us indeed. If Gorbachev’s pleas fall on deaf ears, 2015 will be more volatile than 2014.

Enter The Dragon and the Elephant – China and India Gold Demand Is Paradigm Shift – 2015 Likely To See Chinese Gold Demand At Record Levels Seen in 2013 and 2014

The ongoing paradigm shift that is China’s gradual move to become a dominant player, if not the dominant player, in the global gold market continues. China was the largest buyer of gold in the world again in 2014.

Chinese demand for gold bullion saw some month on month falls in 2014 but full year 2014 again saw very robust demand for physical gold from the 1.3 billion people in China.

China’s gold imports from Hong Kong alone in November 2014 rose to their highest level since February 2014, indicating strong demand in the world’s top bullion buyer ahead of the Lunar New Year which is slighter later this year on February 19th, 2015.

Net gold imports from Hong Kong to the mainland rose to 99.111 tonnes in November from 77.628 tonnes in October.

China does not provide trade data on gold and the Hong Kong figures have served as a proxy for gold flows to the mainland. The Hong Kong data is seen as an increasingly poor proxy as it provides a quite limited picture of total Chinese demand as it does not include direct imports through Shanghai and Beijing which have risen dramatically in recent years.

Chinese gold withdrawals from the Shanghai Gold Exchange (or SGE) are the best indicator of China’s physical gold demand and the best way to establish actual total Chinese physical bullion demand.

Shanghai Gold Exchange (SGE) gold withdrawals were very high throughout 2014 – averaging around 50 tonnes a week to come to some 2,150 tonnes of gold. SGE withdrawals were 57.655 tonnes for the week ending December 26th and 2089 tonnes for the year so far. The last week’s data figure will be released later today.

That means despite a lot of talk of falling Chinese demand – demand in China in 2014 will be only a percent or two below the record levels seen in 2013. It is higher again than the record years for Chinese gold demand that were 2011, 2012 and 2013 (see chart).

To put that 2,150 tonnes of physical gold demand in context, global mining supply will be around 2,900 tonnes this year. This means that the Chinese people alone will buy nearly 75% of total global production.

Most of the gold that enters the Dragon will be hoarded and remain in China for decades to come.

What we in the West need to appreciate is that – in the case of both India and China, where around one third of the people on planet Earth reside – it is masses of individuals, families and local businesses who are driving this demand.

It is the poor, the middle classes and rich and very rich. It is being driven particularly by the burgeoning middle classes and newly who are accumulating gold with their disposable income and net worths. The desire to own gold as savings and financial security is culturally embedded in these ancient cultures amongst every strata of the society.

The experience of people in most Asian countries with fiat paper currencies has not been a good one. Nor has their experience of banks been a good one.

As such, the demand is not speculative and a cyclical, short term blip. Rather, it is a long term, structural shift to higher demand and sustained high levels of demand.

While the trend may dissipate and see peaks and troughs, it is very unlikely to reverse into a trend of mass selling. Nor is it likely to reverse trend anytime soon given the fiscal, monetary and economic challenges facing the Western world and indeed the entire world.

The People’s Bank of China is almost certainly continuing to quietly accumulate gold bullion reserves.

As was the case previously, they will not announce their gold bullion purchases to the market in order to ensure they accumulate sizeable reserves at more competitive prices. They also do not wish to create a run on the dollar – thereby devaluing their sizeable reserves.

The expected announcement from the People’s Bank of China (PBOC) that they have trebled their reserves to over 3,000 tonnes, from 1,054 tonnes, did not materialise in 2014. Having given further thought to the announcement we now question whether the Chinese will make any such announcement in the short term.

More likely is that they will quietly continue to accumulate gold in volume until their gold reserves are the largest in the world and surpass those of the U.S. at over 8,133 tonnes. No announcement is likely until they see a significant monetary, geopolitical and economic advantage in doing so or they have nothing to lose as they realise the inevitable fate of their debased dollar holdings and a potential U.S. default.

Indeed, tactically they may have warned the US Treasury and Fed that any default by the U.S. would lead to them loudly announcing they are selling their dollar holdings and accumulating gold with them and they have the world’s largest gold reserves. This would mortally wound the dollar as global reserve currency and position the yuan as the new global reserve currency.

The ramifications of China’s huge demand for physical gold, both from the Chinese people and the People’s Bank of China is yet to be realised and factored into prices.

2015 Likely To See Indian Gold Demand At Record Levels Seen in 2013 and 2014

2014 also heard much chatter about a significant fall demand in India due to government taxes and import restrictions. However, the death of the Indian gold market was again greatly exaggerated.

Decades, indeed hundreds of years of tradition will not be ended by silly, ineffectual financial repression and bureaucratic government meddling.

Indian demand looks set to be well over 850 tonnes in 2014. This represents a lot of gold and the equivalent of nearly 30% of global mining supply of some 2,900 tonnes.

There is now also huge unrecorded smuggling of gold into India from Bangkok, Dubai and other cities in Asia. The law of unintended consequences took place and the government meddling may have contributed to even higher demand for gold.

Long Term (2015-2020) MSGM Fundamentals

The long term case for having an allocation to precious metals is due to the still positive fundamentals:

Macroeconomic riskis high as there is a serious risk of recessions in major industrial nations with negative data emanating from the debt laden Eurozone, Japan and China. Even the recoveries in the UK and the U.S. are tentative at best. Issues with banks, a la Lehman, or a major terrorist incident or another war could badly impact fragile consumer and investor sentiment.

Systemic risk remains high as little of the problems in the banking and financial system have been addressed and there is a real risk of another ‘Lehman Brothers’ moment or a new ‘Grexit’ moment and seizing up of the global financial system. The massive risk from the unregulated “shadow banking system” continues to be significantly underappreciated. There are many potential Lehman Brothers out there both in the Eurozone but also in the UK and the U.S.

Geopolitical risk remains elevated – particularly in the Middle East and with Russia. This is seen in the continuing significant tensions in Lebanon, Syria etc and between Iran and Israel. There is the real risk of conflict and the consequent effect on oil prices and the global economy. Many analysts believe that the deepening economic, political and military tensions between Japan and China could devolve into an actual war. There are also simmering tensions between the U.S. and its western allies, primarily the UK, and Russia and the resurgent and increasingly powerful China.

Monetary risk is high as the policy response of the Federal Reserve, the ECB, the Bank of England, the BOJ and the majority of central banks to the risks mentioned above continues to be ultra-loose monetary policies, zero interest rate policies (ZIRP), negative interest rate policies (NIRP), the printing and electronic creation of a tsunami of currency and the debasement of paper and electronic currencies. Should the macroeconomic, systemic and geopolitical risks increase even further in the coming months, then the central banks’ response will likely again be more cheap money policies. This will lead to further currency debasement and there is a risk of currency wars deepening.

Gold – Research Shows Is Proven Hedging Instrument and Safe Haven

There is a significant and growing consensus amongst academics, independent researchers and asset allocation experts that gold is a hedging instrument and a safe haven asset. Thus, many financial professionals now believe that gold should form part of investment and savings portfolios for reasons of diversification and financial insurance

Indeed, there is now a large body of academic and independent research showing gold is a safe haven asset and showing gold’s importance in investment and pension portfolios. This allocation is in order to both enhance returns but more importantly reduce overall volatility.

The importance of owning gold in a properly diversified portfolio has been shown in numerous academic papers. It has been shown in independent research by the asset allocation specialists, Mercer Consulting and Ibbotson Associates. It has also been shown by consulting group, New Frontier Advisors and by leading international think tank, Chatham House.

Gold has protected people throughout history from inflation and currency debasement. The historical record also shows how gold has protected people from stock and property market crashes and from asset confiscation.

Conclusion

The outlook in 2015 is uncertain – as uncertain as it has been in our lifetimes.

Volatility and turbulence is guaranteed. Financial repression and currency debasement is certain. Bail-ins, a currency reset and international monetary crisis is on the cards. The question is not if, rather when.

The only free lunch in 2015 and the coming years will again be diversification. We cannot emphasise strongly enough the importance of being properly diversified. Owning hard assets and allocated ownership of physical bullion will aid in protecting and growing wealth.

Dollar, pound or euro cost averaging into position remains prudent. Similarly, when prices rise sharply or rather when currencies devalue – dollar, pound or euro cost averaging out of a position will be prudent as it will be nigh impossible to time a currency bottom or a market top.

Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.